Toys R Us To Sell Or Liquidate All U.S. Stores
DAVID GREENE, HOST:
All right. It is officially game over for Toys R Us. Yesterday, the company's management informed its 33,000 remaining employees that the chain would liquidate and close its doors. It's one of the biggest retail bankruptcies in recent years. And as NPR's Yuki Noguchi reports, this is really the end of an era for shoppers who recall the Toys R Us of the 1980s and '90s, when it became the country's most-prominent toy chain.
YUKI NOGUCHI, BYLINE: When Georgia Fuller discovered Toys R Us was going out of business, she rushed to the nearest store in Fairfax, Va.
GEORGIA FULLER: That's what I heard, so I came over here quickly before I did.
NOGUCHI: Fuller's patronage began when her own adult children were kids.
FULLER: It's a whole part of my life from my own child and walking through these very aisles because I've shopped here for probably 40 years.
NOGUCHI: But this is not how the new generation shops. And that, in a nutshell, was Toys R Us's problem. Stephanie Wissink is a managing partner and consumer analyst with Jefferies. She says today's children have electronic devices for one thing and also tend to keep busier schedules with after-school sports and activities.
STEPHANIE WISSINK: The kids are generally happily scheduled many nights of the week, so the ability to devote dedicated time to play is being constrained.
NOGUCHI: And what busy parent has time to drive to a store? Wissink says many younger parents discover, read reviews and purchase toys increasingly online.
WISSINK: That begs the question, what is the value of the retail experience?
NOGUCHI: Toys R Us, like many other retailers, banked on a model that relied on the physical appeal of a product - its store display, the rows of options lined up on shelves. That is not the reality of shopping today.
WISSINK: Kids are walking up to a device in a house called Alexa and saying, you know, order me this.
NOGUCHI: Amazon not only took market share from Toys R Us, it had the funds to develop new technologies like the Alexa home speaker system that are changing consumer behavior. Toys R Us lacked such resources, saddled by $5 billion in debt from its leveraged buyout 13 years ago. Wissink says the chain's closure is unwelcome news for some of the smaller toy vendors that relied on Toys R Us for distribution.
WISSINK: Many of those companies are likely going to be up for sale. And we should see some consolidation across the vendor community.
NOGUCHI: Aida Gizabi of Arlington, Va., says she's a frequent shopper at the insistence of her boys.
AIDA GIZABI: I'm kind of a cheapo mom because I'm forced to always go to Toys R Us. So I tell them they can pick two toys each. And they're boys under 4, so it's always a car.
NOGUCHI: Gizabi says the company's financial troubles aren't surprising.
GIZABI: It's probably inevitable. I think my children will probably be unfazed by it - but a little sad. It's kind of nostalgic for me, right?
NOGUCHI: As a shopping experience, Gizabi says she's more likely to miss it than her children. Yuki Noguchi, NPR News, Washington.
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